Last week, RBC Capital Markets put out a note estimating that the
average American household will save around
$42 per month on gas over the next year if prices stay as low
as they currently are.

This is particularly good for low-income Americans. It's
basically a tax cut, says Deutsche Bank's chief US economist Joe
LaVorgna.

"If the price is falling, it’s
a tax cut in that you don’t have to pay for other things,"
LaVorgna said. "If you
are on a fixed income or a student or a lower wage worker,
that's money in
your pocket."

If you are living
paycheck-to-paycheck with very little savings, this is a much
bigger deal than if you had a little bit of cushion you could dip
into when gas prices went up a few years ago.

And this isn't just about gas
prices, says LaVorgna. It also will affect heating and cooling
prices. "It won't just be gas, energy prices are so
highly correlated that people are going to get some benefit this
winter."

Where will that extra money go?
"If I had a guess i
would think restaurants and retailers would probably benefit the
most," LaVorgna said.

The people receiving this
energy price relief are more likely to spend than save.
This is great news for an
economy that's largely driven by personal
consumption.